Operating Budget Report 2018 - The City of Red Deer · 2018. OPERATING BUDGET. This is...
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Transcript of Operating Budget Report 2018 - The City of Red Deer · 2018. OPERATING BUDGET. This is...
2 0 1 8 OPERATING BUDGET
This is administrations recommended 2017 Operating Budget to Red Deer City Council. Final decisions will be made as a part of Councils review – changes may occur.
2018 OPERATING BUDGET WWW.REDDEER.CA
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The City of Red Deer uses an Enterprise Business Plan (EBP) to
prepare the budget each year. This ensures we align the direction
and priorities with the resources required. Council provides its
direction through the Strategic Plan, which gives administration
the vision and framework to plan for the upcoming year. The
Strategic Plan is the most important plan as it shapes the
organization and the municipal programs and services provided
to citizens of Red Deer. The budget process translates strategy
into action.
The recommended 2018 Operating Budget must reflect the
economic climate, City Council guidelines and recommendations,
The City’s Stragic Plan and other guiding documents, and the
needs of the community. Through the statistically accurate Ipsos
Citizen Satisfaction Survey conducted in 2017, Red Deerians
identified crime and community safety as the top priority which
The City should address over the next year. Therefore the focus
of the recommended 2018 Operating Budget is adjusting to the
new financial reality and investing in community safety.
The Strategic Plan will ensure that Red Deer is ready for its future
by building a strong foundation and transforming
local government that embraces our principles. ▪
ADJUSTING TO THENEW FINANCIAL REALITYINVESTING IN COMMUNITY SAFETY
2
WHAT IS AN OPERATING BUDGET? The annual operating budget shows the
day-to-day costs of delivering programs and
services. The operating budget maintains
the services, programs and infrastructure
that support 100,418 residents within our
growing city.
These three themes are complemented by the
work that has been done, or still being finalized on
five of the themes from the previous strategic plan:
IDENTITY
Identify and promote our Red Deer
identity
Enable and promote a safer
community
Design and facilitate integrated
movement
Design and plan our community to reflect
our character and values
Shift our primary economic development
focus and activity to within Red Deer
SAFETY
MOVEMENT
DESIGN
ECONOMY
DIALOGUE
Engaging our community and enhancing
our relationships
Planning great spaces and places for
community living
Creating a sustainable financial
foundation
COMMUNITY AMENITIES
FINANCIAL LEADERSHIP
GUIDELINES FOR THE STRATEGIC PLAN:
CITIZEN FOCUSED SERVICEACCESSIBLE AND WELCOMING COMMUNITYSTRATEGICALLY ORIENTED LEADERSHIP
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For each theme in the 2015 – 2018
Strategic Plan, administration is
moving on continued or new action
items in 2017:
DIALOGUE:
• The Dialogue Charter was
developed under the former
Strategic Plan (2009-2014) and
is continued under the current
Strategic Plan (2015-2018).
• The majority of outcomes and
strategies outlined in relation to
public engagement have been
achieved. This includes the research
and development of a Public
Participation Framework.
• The “Public Participation Toolbox”
was adopted by Council in 2015 and
is part of current practice.
• The City won the 2015 AUMA
Sustainability Award for its
work on governance and public
engagement.
COMMUNITY AMENITIES:
• A major community consultation
on community amenities was
completed in 2015 to assist Council’s
decision making regarding the
Capital Budget and 10 Year
Capital Plan.
HOW ARE WE IMPLEMENTING THE 2015-2018 STRATEGIC PLAN?
• Capital projects related to the 2019
Canada Winter Games in Red Deer
have been previously approved by
Council and remain a priority for 2018
and beyond.
• The Capital Budget and 2019-2027
Capital Plan includes 17 of the top 20
ranked amenities in various stages of
development from feasibility studies
to full implementation.
FINANCIAL LEADERSHIP:
• Created and adopted detailed
budget guidelines with a focus
on long term sustainable financial
planning for both capital and
operating budgets.
• The Audit Committee adopted a
series of financial metrics which will
be included in policy.
• New Federal and Provincial programs
are being monitored and considered
in financial planning.
• Modified capital and operating
budget format to show projects and
initiatives by function, not by divisions
and departments. ▪
SUSTAINABILITY PILLARSThe City’s Strategic Plan also serves as
its sustainability plan. By aligning the
two plans, we have adopted the best
practice of integrating sustainability
across the five sustainability pillars.
ENVIRONMENTAL MASTER PLAN IMPLEMENTATION & REVIEW
CULTURE VISION FUTURE UPDATE
ECONOMIC DEVELOPMENT PLAN IMPLEMENTATION
SOCIAL POLICY FRAMEWORK IMPLEMENTATION
GOVERNANCE FRAMEWORK ONGOING REVIEW
ENVIRONMENTAL
CULTURAL
ECONOMIC
SOCIAL
GOVERNANCE
VISION
MISSION
INNOVATIVE THINKING INSPIRED RESULTS VIBRANT COMMUNITY
The City of Red Deer works together to provide leadership and sustainable municipal services for our community.
2018 OPERATING BUDGET WWW.REDDEER.CA
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ECONOMIC REALITYIn early January 2018, City administration
will present the recommended 2018
Operating Budget to City Council for
consideration.
This budget is based on service levels
and guidelines set by Council, and
includes approved capital projects.
THE REALITY: According to the Conference Board
of Canada: Mid-Sized Cities Outlook
2017/2018:
• Hampered by the decline in oil and
cattle prices, Red Deer’s economy
suffered a setback over the last two
years. The local economy shrank on
average 2.9 per cent per year over 2015
-2016, the first drop since 2009.
• Red Deer’s economy is forecast to
recover with real Gross Domestic
Product (GDP) expanding by 2 per
cent in 2017 and 2.2 per cent in 2018.
• The output gain will generate average
employment growth of
3.3 per cent annually over the next two
years.
• The healthy job growth will push
unemployment down from 9.3 per
cent in 2016 to 7.3 per cent in 2018.
According to Alberta Economic Outlook,
a study by ATB Financial:
• The Alberta economy exceeded
expectations in the first half of 2017.
• GDP is now expected to grow 3.1 per
cent in 2017 up from the 2.1 per cent
projection last year. The forecast for
2018 is 2.3 per cent.
• Conventional oil and gas investment is
projected to rise 40 per cent in 2017.
Other indicators show:
• 15 per cent of Red Deer families are living in poverty, with
20 per cent of families considered to be “low income”
• The 2016 Point in Time Homeless count revealed
149 Red Deerians are considered to be homeless, an
increase of 8.8 per cent from 2014.
• Economic slowdown resulting in major user fee revenue
reductions in areas like Transit, Recreation, Parks &
Culture, and Inspections & Licensing.
• With slower economic activity, revenue from Water,
Wastewater and Electric Light & Power have seen
significant reductions.
• Construction rates are down significantly, resulting in
major reductions in offsite levy and land sales revenue.
• The reduction in offsite levy revenue has significantly
impacted the Capital Budget and Plan.
• In 2018, administration is projecting a $1.2 million
reduction in revenue from new construction growth
compared to 2016.
• An additional increase in the Provincial Carbon Tax in
2018 will directly impact the tax levy and utility fees.
• There are definite signs of increased economic activity in
the second half of 2017.
• Increased grant programs –Family and Community
Support Services (FCSS) and Federal Gas Tax Fund (FGTF).
• New grant program: Federal Public Transit Infrastructure
Fund (PTIF).
• The Ipsos and online surveys completed this year show a
high level of satisfaction with City services.
Going into the 2018 budget process,
administration, in response to our
economic and growth reality, dug
deeper to find as many cost savings,
efficiencies, revenue strategies
and innovations where possible,
including items identified by
Red Deer City Council. ▪
4
CAPITAL BUDGETThe 2017 Capital Budget of $80.7 million
million was adopted by City Council
on December 1, 2017. It was developed
within a framework of The City’s 10 year
capital plan. This long term planning
allows some projects to be deferred and
others to be funded over a longer term.
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• City Council guidelines call for a one per cent capital
contribution (amenities and growth) amount in the
2018 Operating Budget and a property tax revenue
requirement that does not exceed two per cent for
the 2018 Operating Budget, which includes the one
per cent capital contribution.
• City Council guidelines also specify that the 2018-
2027 Capital Budget and Plan not exceed the
approved 75 per cent debt limit, and that Reserves
will maintain a positive balance.
• Administration will bring forward an increase in
Recreation and Transit fees in the 2-3 per cent range.
• In recognition of the economic climate, The City
will not establish new fees in 2018 unless directed
by Council.
THE 2018 OPERATING BUDGET BEING RECOMMENDED BY ADMINISTRATION FOLLOWS THESE CITY COUNCIL GUIDELINES:
OPERATING BUDGETAdministration is recommending a 2018
Operating Budget of $2,586,466 that will see
a two per cent tax increase and is comprised
of one per cent in capital contributions, and
one per cent operating funds.
2018 OPERATING BUDGET WWW.REDDEER.CA
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WHY ARE WE INVESTING?
City administration knows it
is important to recognize and
address the major economic
downturn in the community and
its impact on businesses and
individuals in the community.
The proposed 2018 Operating
Budget aligns all new service
plan initiatives with the
Strategic Direction and priorities
established by Red Deer City
Council. We aim to maintain an
acceptable level of maintenance
without significant cost increases
for citizens, all while adhering to
the Budget Guidelines approved
by City Council.
There is also a need to consider
recommendations in the budget
in the context of:
• Community safety
• Social Policy Framework
• Economic Master Plan
• Environmental Master Plan
• Culture Vision
COMMUNITY SAFETY
• Implementation of the Community
Safety Strategy outlined in “Toward a
Vision for a Safe Red Deer”.
• Ongoing advocacy to the Provincial
Government to address the four pillars
outlined in the Drug and Alcohol
Strategy: Prevention, harm reduction,
treatment and enforcement.
• Ongoing advocacy to the Provincial
and Federal Government with regard
to a shelter, affordable housing and a
treatment centre.
• Ongoing advocacy to the Provincial
Government to reduce or eliminate
downstream impacts of needle debris
in the community through the needle
distribution program.
• The addition of four new RCMP
members and two municipal staff.
• Increased investment in the cleanup of
rough sleepers within City parks.
• Investment in the Central Alberta
Crime Prevention Centre.
6
SOCIAL
• A limited increase in Recreation, Parks
and Culture and Transit fees and
charges in recognition of the current
economic downturn and the resultant
decrease in participation in these
programs and services.
• Continued Fee Assistance Program
provided to eligible residents for
Recreation, Parks and Culture programs.
• Continued funding of 211 services to
connect residents with community
program supports and opportunities.
• Continued implementation of the Plan
to End Homelessness and the allocation
of Provincial and Federal funding
through the Community Housing
Advisory Board.
• Continued support to partner with
the Province in the development of an
Integrated Housing Framework.
• Proposed funding for initiatives in
conjunction with the Urban Aboriginal
Voices governance framework.
• Ongoing advocacy to the Provincial and
Federal governments with regards to
shelter, affordable housing and a local
treatment centre.
• Increased funding for RCMP and
municipal police members.
• Continued support for the Central
Alberta Crime Prevention Centre.
EXAMPLES OF PROPOSED AREAS OF INVESTMENT IN 2018:
BASIC FACTS
AREA 69.2 KM2
POPULATION 92,000
GROWTH X2 IN 18 YEARS
RED DEER’S
NEEDLE DISPOSAL GUIDE
COMMUNITY SAFETY IS THE PRIORITY INVESTMENT IN 2018
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777
ENVIRONMENTAL:
• Complete update of the Environmental
Master Plan, including major community
participation.
• Continued support and new funding
for the implementation of the Waste
Management Master Plan, including
a phased introduction of a cart collection
system.
• Continued support for Greening
the Fleet.
• Upgrade of The City’s stormwater system.
• Continued upgrades to the Water and
Wastewater Treatment Plants.
• Continued support for our extensive
park system, including funding for tree
replacement.
CULTURAL:
• Continued funding for many initiatives
outlined in the Red Deer Community
Culture Vision plan, including the
continuation of Alexander Way, the
Riverwalk and the “agora space” or square
along the river.
• Renovation of the historic Central
Elementary School building in
conjunction with the new Canada Games
Plaza for interim use by the Canada
Winter Games Society and the future
relocation of The City’s Culture Services
back to the downtown core.
• Cultural programs and events
through the Community Culture
Development Fund.
• Feasibility study for a future concert hall/
cultural facility underway.
ECONOMIC:
• Support of the 2019 Canada Winter
Games, which is estimated to have an
economic impact of over $130 million in
2019.
• Continue to maintain a low ratio between
residential and commercial taxes – Red
Deer has one of the lowest commercial
tax ratios and rates of comparable cities.
• Continued development of the
Capstone Riverlands area, a major
economic building block for downtown
redevelopment and revitalization.
• Implementation of public participation
program.
• Hosting of the 2018 AUMA Conference
in Red Deer.
• Continued funding for the
implementation of the policies in the
Economic Development Strategy and
the Downtown Investment and
Attraction Plan. ▪
Citizens listed crime as the top issue that they feel The City should
address over the next year in the 2017 Ipsos Citizen Satisfaction Survey.
CRIME
TRANSPORTATION
MUNICIPAL GOV SERVICES
First Mention Second Mention
29%
14%
7%
14%
15%
13%
2018 OPERATING BUDGET WWW.REDDEER.CA
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PLANNING THE OPERATING BUDGETThe operating budget went through
an extensive review process. It is
based on initiatives in the individual
departmental service plans and the
three themes adopted by Council’s
Strategic Plan. Most initiatives were
brought forward to Council for approval
as part of previous plans, strategies
and reports.
The operating budget includes prior
year carry forwards, impact of prior year
budgets, base budget items, funding
adjustment recommendations and
cost savings. The operating budget
also addresses the need to recognize
the major economic downturn in the
community, and its impact on businesses
and individuals in the community. ▪
WWW.REDDEER.CA
99
STRATEGIC & SUSTAINABILITY PRIORITIES CHANGING SERVICE
ACCOMMODATING GROWTH
MAINTENANCE AND MODIFICATIONS
As Per The Strategic Plan(s)
An opportunity to introduce or remove a service or change an existing service level that is not primarily growth related.
Changes that need to be made based on increase to population and land. This would include operating costs related to capital (new).
BASE BUDGET ITEMS
Recommending changes to our current core service area to be more efficient/innovative, respond to legislative/regulatory changes, or meet current needs. Increases/decrease in revenue with increases in service/costs.
PLANNING THE OPERATING BUDGET
THE OPERATING BUDGET “LAYER CAKE” BELOW SHOW THIS IN MORE DETAIL.
Including prior year approvals and increases and decreases in revenue without increases in service level/costs.
A Crime Prevention
Centre: $156,598
B Public Participation
Implementation:
$46,903
C Canada Winter
Games corporate
support and
mobilization:
$479,100
D Corporate
Information
Technology Master
Plan: $80,000
E Streetlight and traffic
light conversion
savings: ($551,574)
A Police member and
municipal employee
increase: $492,900
(2018) and $285,100
(2019)
B Rough Sleeper
Cleanup costs:
$200,000 (2018) and
$200,000 (2019)
C Bower Ponds pavilion
expansion (2019):
$19,000
A Maintenance for
new neighbourhood
parks: $50,000
B Parks operating
costs (new projects):
$25,518
C Alberta Survey
Control Monuments:
Funded from revenue
($100,000)
A Legal support for
Municipal Government
Act and bylaw changes:
$103,940
B Fire dispatch revenue
increase: ($81,650)
A RCMP contract fee
increase: $707,740
B Police grant, Provincial
funding shortfall: $159,000
C Construction growth
revenue: ($1,000,000)
D Recreation, Parks
and Culture revenue
adjustment: $175,000
2018 OPERATING BUDGET WWW.REDDEER.CA
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COMMUNITY INPUT
Throughout the year, The City conducts multiple
public participation opportunities for our citizens
including Let’s Talk, Budget Open House,
displays and surveys at the Farmers Market, online
engagement and Budget on the Go, where The City
took the budget out to citizens for feedback.
The City also conducts a citizen satisfaction survey
through Ipsos, which is statistically accurate. In
2017, respondents were asked about their overall
satisfaction with City services. The results were that
97 per cent of respondents were very satisfied or
somewhat satisfied.
50 PER CENT
Said to: Increase
taxes to maintain or
enhance services at
current level.
41 PER CENT
Said to: Cut services
to maintain or reduce
current tax level.
80%SAY THEY GET GOOD VALUE FOR THEIR TAXES.
WWW.REDDEER.CA
11Source: The City of Calgary 2015 Residential Property Taxes and Utilities Survey
HOW DO WE COMPARE?
The first graph shows how Red Deer compares to other
Canadian cities when looking at municipal taxes only,
followed by a comparison of residential and commercial
tax ratios, showing Red Deer has one of the lowest
commercial taxes in Alberta.
HALIFAX$1,520
500
1,000
1,500
2,000
2,500
3,000
$ REGINA$1,526
MEDICINE HAT
$1,612
WINNIPEG $1,655
CALGARY $1,771
EDMONTON $1,904
VANCOUVER $1,979
RED DEER $1,990
ST.JOHN’S $2,015
LETHBRIDGE $2,211
LEDUC $2,215
TORONTO $2,748
GRANDE PRAIRE $3,069
MUNICIPAL PROPERTY TAX FOR REPRESENTATIVE BUNGALOW HOUSE IN 2016
2017 RESIDENTIAL TO COMMERCIAL TAX RATE RATIOS
AIRDRIE1.5
2.5
2.0
3.0
1.952.11
2.342.39
2.732.81
LETHBRIDGEMEDICINE HATRED DEER CALGARY EDMONTON
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THE CITY OF RED DEER4914 - 48 AVENUE (BOX 5008)RED DEER, AB, CANADA T4N 3T4
reddeer.ca
WHO CAN YOU CONTACT FOR QUESTIONS?
For general inquiries, email
[email protected] or you can contact
one of the City representatives below.
Craig Curtis, City Manager
The City of Red Deer
403.342.8156
Dean Krejci, Chief Financial Officer
The City of Red Deer
403.342.8204
WWW.REDDEER.CA/BU DG ET